Andrew Breckenridge, Executive Vice President of Fortna, explains how supply chain leaders can engage in long-term planning to mitigate future risks, even as they battle the crisis of the day.
The first step towards a long-term vision is to overcome “a mental hurdle,” says Breckenridge – the realization that what supply chains are going through right now is the “new normal”. Second, he advises, companies need to take an ‘outside-in’ view of their operations, drawing on the expertise of supply chain partners and developing business scenarios. simulation to deal with possible future disturbances.
“The supply chain is no longer just a functional space,” explains Breckenridge. “It’s now a horizontal function that impacts both the front-end and support aspects of the business, and determines the types of capabilities and promises that can be made to the market. To support this vision of operations, he adds, companies need an “outside lens”.
Focusing on the future when today’s crises are so demanding can be a huge challenge for supply chain managers. But Breckenridge says organizations need to take a whole new approach to what constitutes success. Where they once focused on metrics like efficiency, cycle time, and productivity, they now need to embrace the mindset of long-term resilience. They need to know what happens when things break and how to fix them with the least possible damage to the organization.
Yet these new “soft” measures can be difficult to pin down. New performance metrics will be based on tools such as value mapping flows and an assessment of how products and inventory actually flow through the network. “Over the past 10 to 15 years, the role of the supply chain leader has changed dramatically,” says Breckenridge. “Making the mental and cultural transition to become a true leader in the supply chain is one of the many challenges. “